Planning matters

With German and Spanish family members, the ongoing debate surrounding the UK’s future relationship with the EU is certainly a hot topic in our household. And being based in Newcastle, the potential impact that future changes could have on the North East economy – and inward investment – is of particular concern.As explored within our latest TRIP report, foreign investment such as the investment by Nissan in Sunderland - which has strong links to the EU market - generate huge benefits for our region as a whole. For instance, an analysis of the commuting patterns within the area surrounding Nissan indicates that c.60% of the 6,700 workers based at the Washington site live outside of the host authority of Sunderland, across the wider region. A further 11,000 North East jobs are also supported in the main supply chain, generating further employment, wage and expenditure benefits for the wider region as demonstrated in Table 1 below.
Table 1: Total direct and supply chain employment impacts Source: NLP analysis / Made in Sunderland
However, whilst the region’s FDI performance increased in 2015, in recent years, the relative performance has declined and the share of job creation captured across the North East remains below the pre-recession average. A smaller number of larger projects (in job creation terms) have also been secured over the past decade, leaving the region more vulnerable to closures such as SSI in Redcar, than would be the case with a wider, more balanced FDI portfolio.
In the context of the above and the wider uncertainties surrounding Brexit, it is even more important that our region’s partners work together to secure a higher level of FDI activity going forward. A number of recent publications have highlighted the need for more central leadership to drive such growth and to provide a consistent and strong message to all potential investors. However, as demonstrated within our TRIP report, a total of 14 organisations are currently engaged in FDI, with a high level of cross-over in sectors being targeted at the local level.Greater levels of collaboration and co-ordination within and across LEP boundaries would help to strengthen the region’s attractiveness as a location for FDI and generate a clearer picture of the strengths of different locations within the region. Whilst it is recognised that this approach could present a number challenges politically, the ultimate aim should be to ensure that the region is best placed to compete for FDI and to capture and retain FDI economic benefits within the North East.It is recognised that this challenge is not a North East issue alone, with Foreign Direct Investment (FDI) playing a key role in the economy of all regions of the UK. Indeed, as identified by Gordon Brown during the recent EU referendum campaign, a total of 10,000 European-owned businesses employ workers within the UK and a further 200,000 individual UK companies trade with Europe.[1]In addition, Ernst & Young’s most recent attractiveness survey highlighted that despite an improvement in overall UK FDI performance during 2015, the future outlook is less certain than at any time in recent memory.[2]Whatever the impact of invoking Article 50, it is clear that action is needed to boost FDI activity across all regions of the UK in response to the findings of the attractiveness survey. In the context of the Nissan example, there is real scope for FDI partners across the region – including DIT, LEPS and local authorities – to work together more closely to secure FDI. The prize – a strengthening of the region’s performance as a whole – can only bring benefits to the region, and, in turn, the national economy.[1] http://labourlist.org/2016/05/gordon-brown-protect-jobs-and-the-environment-by-staying-in-the-eu/[2] Ernst & Young, (2016), Attractiveness survey UK 2016: Positive rebalancing?

As outlined in my previous blog, planning for future student housing needs can be challenging for both local authorities and HE providers alike.
Whilst plan-makers can draw upon sub-national population projections (amongst many other sources) in developing strategies and targets for the general housing market, no equivalent database currently exists for students. In addition, the reduction in public funding for universities and the removal of caps on student numbers have led to a drive in student recruitment, particularly international students.
These challenges are likely to be most pronounced within areas experiencing significant student growth. As demonstrated in Figure 1 below, a total of 15 local authorities across the UK experienced growth of over 10,000+ full time students between 2000/01 and 2014/15.
Figure 1: Local authorities with growth of over 10,000 full time students 2000/01 to 2014/15 | Source: NLP analysis / Higher Education Statistics Authority.
In addition to student growth, the proportion of students requiring housing will also be influenced by the number of UK students originating from outside the host region, as well as the number of EU/international students. The top 15 local authorities for each are outlined in Tables 1 and 2 below:
Table 1: Top 15 local authorities by proportion of UK students from outside of the region | Source: NLP analysis / Higher Education Statistics Authority
Table 2: Top 15 local authorities by proportion of international students | Source: NLP analysis / Higher Education Statistics Authority
This would suggest that those local authorities in particular that are experiencing high growth, and those attracting high numbers of students from outside the region/international students, may benefit from additional purpose built student accommodation in order to reduce pressures on the private rental market.With the growth in student numbers expected to rise, the need to balance student numbers with accommodation capacity will undoubtedly continue to present a range of challenges. Understanding some of the drivers behind this growth as outlined above, will therefore be a key factor in interpreting the numbers of students requiring housing and the type and scale of impacts on the local housing market.Further analysis of these trends is covered within our BeDSPACE methodology, helping local authorities, developers, property agents and HE providers in planning for student accommodation. For more information, see our BeDSPACE flyer.